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IASB votes to propose delaying effective date of revenue standard

The International Accounting Standards Board (IASB) voted Tuesday to
propose a one-year delay in the effective date of the new, converged
revenue recognition standard. The decision follows requests from
financial statement preparers.

The proposal, which also would allow early adoption, keeps the IASB
aligned with FASB, which voted
April 1 to propose a similar delay. IASB members said that although
international convergence is important, the needs of the IASB’s
constituents were more important in their decision to propose a delay.

“Everybody underestimated how much work it takes to do these things
[for implementation],” IASB member Gary Kabureck said during Tuesday’s
board meeting.

Under the proposal, the effective date would be Jan. 1, 2018. The
IASB plans to publish an exposure draft that would invite public
comment, and would finalize its discussions on the issue at its board
meeting in July.

Feedback the IASB received from financial statement preparers,
particularly those in the telecommunications and automotive
industries, requested a delay. Reasons cited by preparers, board
members, and IASB staff for proposing a delay included:

The original publication of the standard in May 2014 was
delayed by several months.

The IASB is proposing amendments
to the standard that will require further analysis and work in
implementation if they are approved. (FASB also is proposing changes
to the standard.)

The timing of the release of new IT
software solutions may make it difficult for some companies to be
ready to implement the new standard by the original effective
date.

The challenges of the new lease accounting standard have been pervasive to say the least. In this free, independently-written report, you'll learn effective adoption strategies as well as resources for easing the transition to the new standard.